Does this model HELOC principal paydown?

No. It assumes interest-only on the draw. Paying principal would lower HELOC interest faster.

What about HELOC draw/repayment periods?

Not modeled. We assume a constant draw for the horizon. Adjust horizon to your expected use period.

Are taxes/insurance included?

No. Results focus on P&I/interest only.

Can the draw exceed LTV capacity?

The model caps the draw at your LTV limit after costs. Enter a lower draw if you want to stay below that.

What if rates change?

HELOC rates are variable. Use a higher rate for stress testing if you expect increases.

finance calculator

HELOC vs Cash-Out Refi Calculator

Compare taking cash from your home via a HELOC versus a cash-out refinance, including payments and interest over a chosen horizon.

Results

Max loan at LTV: $400,000
Cash available at max LTV: $76,000
Draw modeled: $50,000
Cash-out monthly payment (P&I): $2,364
Current mortgage payment (P&I): $2,076
Payment change (cash-out vs current): $288
HELOC interest-only payment: $333
HELOC interest over horizon: $20,000
Cash-out interest over horizon: $117,941
Current loan + HELOC interest over horizon: $124,933
Interest difference (HELOC scenario − cash-out): $6,992

How to use this calculator

Enter home value, current balance/rate/term, and months elapsed.
Enter LTV limit, desired cash draw, closing costs, and cash-out rate/term.
Enter HELOC rate and comparison horizon (how long you’ll carry the balance).
Review cash available, payments, and interest over the horizon for both options.

Inputs explained

Max LTV: Typical conventional cash-out cap is 80%; adjust to your program.
Draw amount: Cash you want. If above LTV capacity, the model caps it.
Horizon: How long you expect to keep the debt; drives the interest comparison.
HELOC rate: Variable rate for the line; payments modeled as interest-only.

How it works

Max cash-out = home value × LTV limit − current balance − costs. Draw is capped at that amount.

Cash-out: new loan = current balance + draw + costs (capped by LTV). Payment and horizon interest are calculated at the cash-out rate/term.

HELOC: interest-only payment = draw × rate/12. Horizon interest = current loan interest over the horizon + HELOC interest-only charges.

We show payment change vs current mortgage and the interest difference between HELOC scenario and cash-out over the horizon.

Formula

Max cash-out = Value × LTV − Balance − Costs
Cash-out payment = standard amortization at cash-out rate/term
HELOC payment = Draw × HELOC rate ÷ 12 (interest-only)
Interest over horizon: amortization simulation for each option

When to use it

Comparing fixed-rate cash-out vs variable-rate HELOC for renovation funds.
Checking payment impact of rolling first mortgage + cash-out vs keeping the first and adding a HELOC.
Estimating interest cost over 3–7 years if you plan to sell or refi again.

Tips & cautions

If rates are higher than your current loan, a HELOC might preserve the low first-mortgage rate—compare interest difference over your horizon.
For short horizons, HELOC interest-only can be cheaper; for longer holds, a fixed cash-out may win if HELOC rates rise.
Include closing costs to avoid overestimating cash-out proceeds; paying costs upfront increases available cash.
HELOC rates float—add a cushion if you expect rate hikes.
HELOC modeled as interest-only with no draws/paydown; real HELOCs may require principal after draw period.
Cash-out interest comparison is horizon-based only; does not include time value of money or full-term totals.
Does not include PMI, taxes, insurance, or HELOC annual fees.
If the desired draw exceeds LTV capacity, it is capped; manual adjustments may be needed for second-position HELOC limits.

Worked examples

$500k value, $320k balance, 80% LTV, need $50k, 6.5% cash-out vs 8% HELOC, 5-year horizon

Max cash available ≈ $76k (after $4k costs); modeled draw = $50k
Cash-out P&I ≈ $2,364 (vs current $2,076), interest over 5 years ≈ $117,941
HELOC interest-only ≈ $333/mo; 5-year interest (current + HELOC) ≈ $124,933
Interest difference ≈ $6,992 favoring cash-out over 5 years

$650k value, $410k balance, need $80k, 6% cash-out vs 9% HELOC, 5-year horizon

Max cash available ≈ $105k (after $5k costs); modeled draw = $80k
Cash-out P&I ≈ $2,968 (vs current $2,700), interest over 5 years ≈ $143,686
HELOC interest-only ≈ $600/mo; 5-year interest (current + HELOC) ≈ $173,540
Interest difference ≈ $29,854 favoring cash-out over 5 years

Deep dive

This HELOC vs cash-out refinance calculator compares payments and interest over your chosen horizon so you can pick the cheaper way to tap equity.

Use it to weigh variable HELOC interest-only costs against a fixed-rate cash-out with closing costs and a reset mortgage payment.

FAQs

Does this model HELOC principal paydown?: No. It assumes interest-only on the draw. Paying principal would lower HELOC interest faster.
What about HELOC draw/repayment periods?: Not modeled. We assume a constant draw for the horizon. Adjust horizon to your expected use period.
Are taxes/insurance included?: No. Results focus on P&I/interest only.
Can the draw exceed LTV capacity?: The model caps the draw at your LTV limit after costs. Enter a lower draw if you want to stay below that.
What if rates change?: HELOC rates are variable. Use a higher rate for stress testing if you expect increases.

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See how much cash you can pull from your home, your new payment, and interest tradeoffs when refinancing with a cash-out.

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Estimate your monthly mortgage payment, total interest, and payoff schedule with one input-driven tool.

Estimates only. HELOC terms, closing costs, LTV limits, variable rates, and underwriting vary by lender. Confirm program details before relying on these figures.